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Strength Seen in O-I Glass (OI): Can Its 17.3% Jump Turn into More Strength?

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O-I Glass (OI - Free Report) shares soared 17.3% in the last trading session to close at $14.01. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 4.2% loss over the past four weeks.

OI-Glass has gained on the news that it will replace HMS Holdings Corp in the S&P SmallCap 600 effective prior to the opening of trading Mar 30, 2021. The S&P SmallCap 600 seeks to measure the small-cap segment of the U.S. equity market. The index has been designed to track companies that meet specific inclusion criteria to ensure that they are liquid and financially viable.

Further, O-I Glass recently announced that it will invest approximately $75 million in expansion at its Zipaquirá, Colombia facility in a bid to support strong customer demand for highly sustainable glass packaging. Upon completion by the end of 2022, the project is expected to add nearly 2% capacity to the company’s Americas segment and produce about 500 million bottles annually.

Price and Consensus

Price Consensus Chart for OI

This glass container manufacturer is expected to post quarterly earnings of $0.31 per share in its upcoming report, which represents a year-over-year change of -24.4%. Revenues are expected to be $1.48 billion, down 5.4% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For O-I Glass, the consensus EPS estimate for the quarter has been revised 11.5% lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on OI going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank 3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

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